Bitcoin’s ripple effect on Chainlink – Will it last

Bitcoin’s rally had a ripple effect on the rest of the market, with many alts seeing surprising gains. While most among the top 20 alts were flashing green at press time, some performed better than others. Chainlink was a case in point. 

LINK has had a good week

The altcoin’s price rallied by nearly 30% in just one week. In fact, it noted the best gains over that period, second only to MATIC. At press time, the altcoin was trading at $19.32. While on the daily charts, it was in the green for most of last week, at press time, LINK did dip by 1.81% in 24 hours. 

Can this be a concern for the crypto amid its weekly price rally? Moreover, is LINK’s rally fueled only by general market bullishness or will the price hold once it recedes?

What do the metrics say? 

A recent at the metrics for LINK found that that in light of the alt’s rising price, its supply of top addresses went up considerably, forming an almost parabolic structure. On the downside, the percentage of LINK’s supply in smart contracts has fallen over time too. At the time of writing, the same stood at 56.31%. These findings present a very neutral picture for the crypto-asset. 

Source: Glassnode

A previous article had highlighted how LINK needed higher velocity to trade at better levels. At press time, velocity for the alt oscillated at 3.47 on the one-day chart, a level which isn’t a considerable jump looking at its current rally.

That being said, while Chainlink’s MVRV ratio saw newer highs, it can also imply that the market value is higher than the realized value. Therefore, selling pressure can trigger minor price dips (as seen at press time). 

Source: Sanbase

So, will the price hold up? 

A look at Chainlink’s price action further suggested that trade volumes saw decent spikes, making the 26 July green candlestick the tallest green candle since 27 May. Additionally, the Relative Strength Index for LINK was able to break the resistance level it was struggling with at 48.4. At press time, the RSI for the altcoin was reading 59.8, with the same still hiking on the daily chart. 

Source: LINK/USDT Trading View

Other factors that contributed to the spike

LINK’s price hike last week may also have been fueled by other factors like PolyWhirl integrating Chainlink VRF to secure token burns and decentralize them. Another factor may be the more recent announcement by Crypto.com that it would integrate Chainlink price feeds into its Cronos testnet. 

Even though the metrics for LINK painted a neutral picture, external news garnered a decent amount of interest in the alt. With that in mind, it will be safe to say that nothing too out of the ordinary should be expected from LINK’s price in the short term. However, another minor rally or dip wouldn’t be shocking either.